Snapchat is a multimedia messaging app, whose popularity has grown worldwide so the app is used extensively globally. The app was created by Even Spiegel, Bobby Murphy and Reggie Brown. Snapchat is resided by the top celebrities of different film industry, experts of various fields and influencers from around the world.
Stocks of the Snapchat:
Stocks of the Snapchat has experienced tumble recently as it has published mixture fourth-quarter numbers recently. The revenue of the social media company has raised 44% annually, however the annual goal was not met just by 1 Million.
Another unfortunate trend was also seen; the net losses had also widened from 190-7 Million to $240.7 Million. The main reason of the net losses is mainly high stock-based compensation expenses. Another good news is regarding the adjusted EBTIDA of Snapchat that excludes the stock-based compensation expenses, was around $42.3 Million. Thus, a big improvement was seen as it recovered from the last year’s $50.4 Million. It means that Non-GAAP earnings were $0.03 that meant that the expectation was not reached only by two cents.
Going through the report of the Snapchat, it turns out that the results are not damaging, at all. Rather, stocks of the Snapchat paint a good picture due to following reasons:
1- User Growth
It is noticeable that the user growth of the Snapchat increased by 4% sequentially and 17% annually to 218 Million during the fourth quarter. Both growth rates paint a positive growth rate for the app.
2- Gaining Users Globally
Snapchat is also gaining overseas users at an accelerated rate. Three regions – North America, Europe and Rest of the World – have seen noticeable growth rate wherein rest of the world has seen 36% growth rate. North America has witnessed 9%, whereas Europe has seen 12% overseas users’ growth rate.
3- ARPU Growth Rate
ARPU (Average Revenue Per User) growth rate is also growing steadily due to the new features introduced in the app.
4- Expanded Video Ecosystem
Its video ecosystem is also seen growing which is adding to the annual ARPU rate.
5- Improved Cash Flow
It had witnessed improved cash flow at the negative free cash flow of $75.9 Million – it is better because it improved from negative $148.8 Million of last year.
Conclusion: Is it good to buy Snapchat Stock?
Despite its good trends, Snapchat is not a buy for you presently. When it improves furthermore, you can buy it then.